Michael Arrington, the founder and co-editor of TechCrunch, is forming a venture capital fund to invest in some of the startups his bloggers write about, according to a Fortune report.

The $20 million CrunchFund will reportedly be funded primarily by AOL, which bought TechCrunch last year, as well as venture capital firms such as Sequoia Capital, Kleiner Perkins Caufield & Byers, and Greylock Partners.

Arrington and AOL did not respond to requests for comment.

Although the arrangement flies in the face of traditional journalism's principles of avoiding conflicts of interest, Arrington told The New York Times that the fund's activities would not influence TechCrunch's coverage and that he would disclose his investments on the site and in stories.

"I don't claim to be a journalist," Arrington told the newspaper. "I hold myself to higher standards of transparency and disclosure."

Arrington sparked an ethics debate earlier this year when he disclosed that he had become a limited partner in two venture capital firms and invested in high-profile startups backed by Napster founder Shawn Fanning and Digg creator Kevin Rose. He noted at the time that he had refrained from investing in startups since 2009 to avoid accusations of conflicts of interest.

Like most media companies, AOL prohibits its reporters and editors from investing in the companies they write about. However, the company appears to have made an exception for Arrington.

Update at 11 p.m. PT: AOL announced that Arrington has resigned his duties as managing editor of TechCrunch and "will continue to write for TechCrunch, but will have no editorial oversight." Erick Schonfeld will serve as interim editor while the company searches for a replacement.

Update at 7:44 a.m. PT on Sept. 2: Henry Blodget at Business Insider reports that Arrington "no longer works for TechCrunch," per an e-mail to BI from HuffPo honcho Arianna Huffington. Rather, Blodget relates, Arrington's relationship now is with AOL Ventures.